Significant progress has been made in the areas of functional and anatomical MRI. In the area of functional MRI, AMRI has developed a deep-breathing paradigm that causes large signal changes. These signal changes have a spatio-temporal character that is symmetric between the two brain hemispheres and suggestive of the underlying neuro-vascular control system. We are currently further studying these patterns in healthy subjects. In addition, we have started to apply this respiratory challenge to study compromised blood flow in patients with neuro-vascular disease. A number of new findings have been made in the area of anatomical MRI. We have continued to characterize the contrast patterns seen in high field MRI sensitized to magnetic susceptibility contrast. We previously have shown that this type of contrast reveals neuro-anatomical detail not seen before with MRI. Much effort is currently being spent on revealing the contributions to this contrast mechanism. We have confirmed reports by other researchers that tissue orientation relative to the MRI magnetic fields influences magnetic susceptibility contrast. Preliminary data suggest that this effect is not caused by phase effects due to the microstructural organization of susceptibility inclusions, as suggested previously, but rather anisotropy in the magnetic susceptibility. This may originate from helical proteins that are abundant in white matter, which may have important consequences for the interpretation of MRI data. Further work will be needed to establish this. In a related project, we attempted to investigate the origin of ring shaped appearance of brain lesions in high field MRI of Multiple Sclerosis. Correlative data suggests that the contrast originates from iron deposits in the periphery of lesions. Origin, chemical form, and toxicity of these iron deposits remain subject of further investiagtion. In a third project, we attempted to investigate the role of chemical and spin exchange to the large frequency shifts underlying the strong contrast observed in high field brain images. For this purpose, fixed and fresh tissue samples obtained from humans and animals were investigated. It was found that exchange process significantly contribute to the observed contrast, however with a polarity that is opposite to that observed in earlier preliminary studies.